Corn Exports Rise, Market Awaits Acreage Report
USDA Report Offers Limited Changes Amid Weather Concerns
Grain markets reacted mildly to a recent USDA report, remaining focused on evolving weather patterns and anticipation of the upcoming Planted Acreage and Stocks Report. Despite hopes for significant revisions, the June USDA Supply and Demand report brought only modest adjustments.
Corn Export Adjustments
The USDA increased corn export projections by 50 million bushels, acknowledging strong demand. Exports have already met the USDA’s initial full-year estimate with two and a half months left in the marketing year, averaging 37 million bushels weekly for the past four weeks. Analysts had predicted increases ranging from 50 to 150 million bushels. New crop wheat exports also saw a bump, rising by 25 million bushels.
These changes tightened old crop corn carryout to 1.365 billion bushels, and reduced new crop carryout to 1.750 billion bushels from a previous estimate of 1.8 billion. World estimates remained largely unchanged, with slight adjustments to corn and wheat carryout and a small increase in soybean carryout.
Weather Drives Market Sentiment
The market largely dismissed the USDA’s revisions, turning its attention back to weather conditions. According to the National Oceanic and Atmospheric Administration (NOAA), the U.S. experienced its fifth-warmest May on record, contributing to ongoing concerns about crop development. NOAA May 2024 Climate Report
The eastern Corn Belt remains overly saturated, hindering planting completion. While the western belt has received sufficient rainfall to support crop development, some areas are experiencing dry subsoil conditions. Many producers would welcome warmer temperatures to accelerate growth.
Acreage Report Looms
The June 30th Planted Acreage and Stocks Report is expected to provide more significant market direction. Concerns exist regarding a potential increase in corn acreage due to favorable planting conditions and price ratios relative to soybeans and cotton. However, excessive rainfall in key production areas slowed planting progress towards the end of the season.
Brooks Schaffer of Palmetto Grain noted that analysts are now focusing on estimating planted acreage to prepare for the USDA report. He can be reached at [email protected] or 843-540-4540.
Trade Deal Uncertainty
Market participants remain skeptical of recent announcements regarding potential trade deals. Administration officials have repeatedly suggested new agreements are imminent, but these claims have lost credibility. Expectations are that any substantial announcements will be delayed until closer to the end-of-month deadline for a reciprocal tariff pause.
While Donald Trump announced a framework agreement with China, it lacked specific details regarding agricultural commodities. Given China’s past failure to meet commitments outlined in a previous trade deal with specific commodity quantities, the market is unlikely to react positively to a vague framework.
The EPA is scheduled to release the US Renewable Volume Obligations on Friday, June 12th, a key component of biofuel policy. Further developments regarding small refinery exemptions and the 45z rules remain tied up in congressional legislation.
